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VC Funding for Digital Health in Q1 2019 Significantly Surpasses Prior Quarter

Venture Capital funding both private and corporate for Digital Health (Healthcare IT) companies reached $2 billion in Q1 2019, according to a report from Mercom Capital Group. This number surpasses the prior quarter’s total of $1.4 billion, but it was significantly less than the $2.5 billion of Q1 2018. Of the 149 Digital Health VC deals in Q1 2019, the largest included $170 million raised by Doctolib, $100 million by Health Catalyst, and $88 million by Calm.

Outside of specific companies, the top funded Healthcare IT and Digital Health categories included Data Analytics with $557 million, mHealth Apps with $392 million, Telemedicine with $220 million, and Healthcare Booking with $177 million. Across all of the Digital Health deals during Q1 2019, a total of 371 investors participated, with 16 FDA and CE approvals issued.

However, 371 participating investors is a decline from Q1 2018’s 412 investors. M&A transactions with Digital Health Companies also fell slightly to 45 in Q1 2019 versus 48 in Q1 2018. Lastly the largest disclosed M&A transaction for Q1 2019 is the acquisition of Voalte by Hill-Rom Holdings for $195 million.

“Funding levels were down versus last year in Digital Health in the absence of larger deals. M&A activity was also flat,” said Raj Prabhu, the CEO of Mercom Capital Group, in a press statement. “However, Digital Health public equities experienced a turnaround in Q1 with 66% of them beating the S&P 500 versus Q4 2018 when 63% of the equities we tracked performed below the S&P 500. Favorable market conditions have prompted several companies to announce IPO plans.”